Setting yourself up for success financially is a no-brainer, but it’s especially true for physicians and dentists. You’ve dedicated your time, energy, and money into creating a life for yourself, so creating a stable financial base is crucial for guaranteeing long term stability, both professionally and personally.
However, it’s not always that simple. Too many physicians and dentists find themselves finishing school, buying their first home, or establishing their own private practice before they realize that their finances are lacking. They feel up to their ears in debt, confused by interest rates, and worry that their training was all for nothing. In fact, the average debt for even public medical school graduates was $194,280 in 2021.
This is why setting yourself up for financial success is important, both for your family life and your professional practice. Unfortunately, many graduates and practicing physicians don’t realize each phase of their journey has unique benchmarks and goals. So, if you want to establish a stable financial future for your family and your practice, follow this list of financial goals for three phases of your career:
1. School Years: Setting a Foundation
At this point in your career, you’re ready to land your first job, settle into a stable home, and establish yourself. However, the mountain of debt and workload ahead can feel overwhelming.
Here are some strategies to set your firm foundation:
- First, you need to make saving habitual. The more intentional you are with your money, the more it will pay you back.
- Second, it’s crucial that you have reliable transportation to work. Whether you take the subway or commute, make sure that getting into work is never a question.
- Finally, you can better prepare yourself by budgeting for personal milestones, such as weddings, family trips, and having children. If you prepare for these now, you’ll enjoy them much more.
2. Training Years: Building Stability and Planning for Your Future
You’ve established yourself at your job and are growing a family. Obviously, the journey doesn’t end there. The key at this stage is to secure your family’s long term stability and plan for the future.
Here are proven approaches for making that happen:
- Discuss with your family if investing in your forever home makes financial sense at this time. A great place to start is to calculate how much mortgage you can afford, then devising a plan for what kind of house (if any) is a wise investment.
- Children may be in your future, so you’ll want to prepare their expenses. Figure out what kind of school, extracurriculars, and family trips are ideal for your situation.
- Talk with your children about college. If they want to attend college, decide what approach makes sense and plan accordingly.
3. Production Years: Building Wealth and Protecting Your Financial Future
At this stage of your career and personal life, continue building and maintaining your wealth. More stability equals family stability, higher education, advancing your career even further, and so much more.
Here are three ways to build your legacy:
- If you own a home, set aside some money for home improvements. Maximizing your home’s value means more resources for you and your family.
- You can easily build wealth by investing in assets. Check out this list of assets to get started.
- Consider if you have the money to reconsolidate or pay off any debt early. When you have less debt on your plate, you have more capital to invest, save, or spend.
If you’re interested in learning more about our services, or how we can help you with your finances as a new or training medical professional, contact us here.